RBC Capital MarketsTax Credit Equity Group

Strictly Private and Confidential

August 20-22, 2014Prepared for New Mexico Housing Summit

2

Successful Approaches to Public Private PartnershipsLuna Lodge & The Sundowner

Problem Identification

Project Description

Public Benefit

Project Participants

Development Financing

Section 1:Problem Identification

44

Problem Identification

Vacant motels lending to blighted conditions

Need to jumpstart Near Heights Metropolitan and East Gateway Sector Redevelopment Plan Areas

Lack of quality affordable housing options in the area

Desire to preserve the historic integrity of Route 66

Redevelopment Plan Objectives:

Eliminate blight and prevent further deterioration of property values in the area • Revitalization of vacant motel properties

Stimulate public and nonprofit/private investment in the area • Private equity and federal resources leveraged through local investment

Increase the number of jobs in the area and increase the patronage of local businesses

• Construction job creation and attraction of new residents to support local businesses

Empower residents while furthering economic self-sufficiency and sustainability • New affordable and supportive housing options

Section 2:Project Descriptions

66

Luna Lodge & The Sundowner

Luna Lodge

Adaptive reuse of 1950s 28-room motel listed on the National Register

Redeveloped into 30-unit (14 units in original motel building + 16 new construction units on an adjacent parcel) residential community

Community space, including a demonstration kitchen for the residents seeking to acquire skills in the food industry

10 units set-aside for persons with Special Needs

Utilized Low Income Housing and Historic Tax Credits as a component of financing

The Sundowner

Adaptive reuse of 1950s 110-room motel

Redeveloped into 71-unit mixed-income residential community

Includes a community room, computer room, tot lot, limited access gate, courtyard, covered patio/picnic area, laundry facilities, community garden

18 units set-aside for persons with Special Needs

Utilized Low Income Housing Tax Credits as a component of financing

77

Luna Lodge

BEFORE

Vacant & Dilapidated

Blighting Influence

88

Luna Lodge

AFTER

99

The Sundowner

BEFORE

Vacant & Dilapidated

Blighting Influence

1010

The Sundowner

AFTER

Section 3:Public Benefit

12

Public BenefitsLuna Lodge & The Sundowner

Elimination of Blighting Influences Furtherance of Redevelopment Plan objectives

Reactivation of long vacant properties

Much needed investment in an undercapitalized area

Increased public safety

Increased supply of affordable housing 101 new affordable residential dwelling units (10% - 50% market advantage)

28 units for special needs households (on-site supportive services)

Introduction of street frontage activating uses

Historic preservation Architecture consistent with Route 66 historic past

Spotlights the potential for motels to serve as an asset in the community

Winner of several historic preservation awards

Leverage of non-local resources Local resources served to secure private equity, federal subsidy, and state loan/grant funding

Section 4:Participants

1414

Luna Lodge & The Sundowner

Public

US Department of Housing & Urban Development

New Mexico Mortgage and Finance Authority

City of Albuquerque

Metropolitan Redevelopment Agency

Private

NewLife Homes, Inc.

RBC Capital Market

Garrett Smith Ltd.

Local General & Sub Contractors

JL Gray Company

Section 5:Project Financing

1616

Project Financing

Luna Lodge (TDC ~ $4.8MM)

Tax Credit Equity - $3,151,529 (66% of total)

NM MFA First Mortgage - $138,000

City of Albuquerque - $1,241,523

NMED - $50,000

FHLB AHP - $210,000

Deferred Developer Fee - $31,796

The Sundowner (TDC ~ $9.3 MM)

Tax Credit Equity - $5,428,296 (58% of total)

NM MFA First Mortgage - $500,000

Primero Grant & Loan - $274,844

City of Albuquerque - $2,112,908

HUD CoC & NMED - $431,952

FHLB AHP - $500,000

Deferred Developer Fee - $20,174

Non-local leveraged funding$3.55 Million

Non-local leveraged funding$7.14 Million